Recently Released Market Study: India Metals Report Q4 2012

Fast Market Research recommends "India Metals Report Q4 2012" from Business Monitor International, now available


Boston, MA -- (SBWire) -- 12/10/2012 --Indian metals production will hit headwinds in 2013 as market growth moderates in the face of a slowdown in the automotives industry. Producers may also struggle to secure raw material and energy supplies for their operations, according to this latest India Metals Report from BMI.

Indian crude steel output grew 5.5% to 72.1mn tonnes (mnt) in 2011 with declining activity in the automotives market and disruptions to raw material supplies undermining growth. BMI estimates consumption growth to fall to 6.5% (70.3mnt) in 2011, from 2010 levels of 7.4% growth. Finished steel consumption is forecast to reach 94.7mnt in 2016. Factors depressing demand growth include the effects of higher interest rates on the automotives and construction sectors - the country's top steel-using industries.

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Aluminium consumption was estimated at 1.57mnt in 2011 and BMI expects it to reach 1.91mnt in 2016 due to growth in domestic manufacturing. A decline in activity in the automotives market coupled with raw materials supply problems and continued delays in capacity expansion will limit consumption growth to 4.5% in 2012. Vedanta's expansion project, which is raising its smelting capacity from 1.6mn tonnes per annum (mntpa) to 2.5mntpa, along with a recovery in the aluminium market and hope that constraints to growth will be alleviated, should support growth in primary aluminium output to reach 1.95mnt in India in 2016. In addition, we have raised our forecast for net exports from 132,000 tonnes to 261,000 tonnes in 2011. Lower levels of domestic consumption than previously forecast should ensure that India maintains a trade surplus in aluminium over the medium term and does not descend into deficit.

Indian refined lead output declined by 9.5% to 151,212 tonnes in 2011 despite Vedanta subsidiary Hindustan Zinc Ltd's (HZL) new 100,000tpa Dariba complex, commissioned in Q311, coming online. By 2012, Indian lead smelting will have reached the limit of capacity. However, consumption will continue to rise, forcing the market to depend on imports, which should reach 75,000 tonnes by 2016.

Indian refined zinc output grew 11% to an estimated 778,000 tonnes in 2011, leading to an exportable surplus of around 85,000 tonnes. Domestic demand declined by 3.6% to 546,000 tonnes in 2011 and is set to reach 688,512 tonnes by 2016, an increase of over 4.7% over the period. Production growth strengthened in 2011 after industry leader HZL brings its Rajpura Dariba smelter up to full capacity. India will remain balanced between supply and demand with modest net exports over the next five years. Beyond 2011, the medium-outlook for consumption is broadly positive.

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